Structural Monitoring Systems Plc reports a profitable December quarter with 40% revenue growth, driven by strong avionics sales and progress toward FAA certification of its CVM™ technology.
- 1HFY26 profit after tax of $1.5 million reversing prior loss
- Quarterly revenue up 40% year-on-year to $8.4 million
- Strong avionics segment growth with 48% revenue increase
- Advancement of CVM™ technology toward FAA engagement
- Appointment of Neville Bassett AM as Non-Executive Chair
Robust Financial Turnaround
Structural Monitoring Systems Plc (ASX – SMN) has delivered a notable financial turnaround in the first half of fiscal 2026, posting a profit after tax of $1.5 million compared to a loss of $2.3 million in the same period last year. This improvement is underpinned by a 31% increase in revenue to $16.5 million and a substantial rise in EBITDA to $3.6 million, signalling stronger operational efficiency and margin expansion.
The December 2025 quarter alone saw revenue climb 40% year-on-year to $8.4 million, marking the company’s fourth consecutive profitable quarter. The avionics division, a key growth driver, recorded an impressive 48% revenue increase, reflecting robust demand across specialised mission applications and a healthy product pipeline.
Progress on CVM™ Certification and Commercialisation
Structural Monitoring Systems is advancing its CVM™ smart sensor technology, focusing on technical documentation validation for the Boeing 737NG application. The company is nearing completion of this milestone, which will enable engagement with the Federal Aviation Administration (FAA) for certification and review of service bulletins. This progress is critical for commercial adoption and potential OEM partnerships, positioning CVM™ as a promising growth avenue.
Discussions with major operators continue, aiming to secure commercial agreements and OEM buy-in. The company’s strategic focus on FAA certification underscores its commitment to expanding CVM™’s market footprint in aviation safety and monitoring solutions.
Corporate Governance and Legal Developments
In a significant governance update, Neville Bassett AM was appointed Non-Executive Chair, bringing over three decades of experience in corporate governance and financial management. His leadership is expected to enhance board cohesion and strategic oversight during this pivotal growth phase.
The company also resolved a legal dispute involving a former director, with the Federal Court dismissing an injunction against SMS and ordering the former director to cover related costs. Following this, the board removed the director and terminated the associated executive services agreement, allowing the company to maintain operational focus amid ongoing proceedings.
Financial Position and Outlook
Structural Monitoring Systems ended the quarter with $4.6 million in cash and total available funding of $11.1 million, including unused credit facilities. Operating cash flow was positive at $2.5 million, supporting continued investment in manufacturing and product development. The company’s contract manufacturing segment remains profitable, contributing operational leverage and supporting overhead absorption.
CEO Rick Freeman highlighted the strength of the diversified product portfolio and the promising avionics product pipeline expected to launch in FY27 and FY28, underpinning the company’s five-year growth strategy.
Bottom Line?
With profitability sustained and FAA certification on the horizon, Structural Monitoring Systems is poised for a transformative growth phase.
Questions in the middle?
- When will the FAA certification for CVM™ be finalised and what commercial impact will it have?
- How will the new board leadership influence strategic decisions and operational execution?
- What is the outlook for the avionics product pipeline beyond FY28 in terms of revenue contribution?